Samsung Biologics plans to separate CDMO, biosimilar biz

Seoul, May 22 (IANS) Samsung Biologics, a biotech arm of South Korea's Samsung Group, said on Thursday it plans to spin off its biosimilar development business to streamline its operations and focus on its core contract development and manufacturing organisation (CDMO) services.

According to a regulatory filing, the company will establish a new entity, Samsung Epis Holdings, which will later incorporate Samsung Bioepis Co., a biosimilar drug developer, as a wholly owned subsidiary, reports Yonhap news agency.

The spinoff process will proceed with the submission of a securities report on July 29, followed by a shareholders meeting on Sept. 16 for final approval.

Samsung Biologics explained that the split will allow the company to concentrate resources on its CDMO business, which operates under a different revenue model compared to biosimilars.

CDMO refers to a company that handles not only the outsourced manufacturing of drug substances but also all of the innovation and development work that occurs prior to production.

In particular, the company acknowledged that some customers have raised concerns over the possibility that proprietary technologies for original drugs might be shared with Samsung Bioepis, which operates in the biosimilar space.

"As Samsung Bioepis has been expanding its biosimilar business, the concerns of Samsung Biologics' customers have gradually increased, which has had some impact on the competitiveness of our orders," said Ryu Seung-ho, chief financial officer at Samsung Biologics, during an online briefing.

"After the separation, we expect our customers' concerns about conflicts of interest will be better addressed."

Samsung Biologics originally established Samsung Bioepis as a joint venture with U.S. pharmaceutical company Biogen Inc. in 2012. It acquired Biogen's stake for US$2.3 billion in 2022, making Bioepis a wholly-owned subsidiary.

Ryu also emphasized that the spinoff is not part of any broader corporate governance restructuring within Samsung Group.

In a separate statement, Samsung Bioepis said the spinoff will not impact its day-to-day operations.

"Samsung Bioepis' ongoing business operations, including research and development, manufacturing, supply distribution and commercialization of biologic medicines, will not be affected by the spinoff," the company said.

"We will continue to focus on our core business, and we remain committed to ensuring the continued development, manufacturing and distribution of high-quality biosimilar medicines to patients around the world without any disruption."

By separating the two businesses, Samsung Biologics said it aims to reinforce the independence of both entities, allowing each to sharpen its strategic focus. The company said this will enhance competitiveness, operational efficiency and long-term value for shareholders.

Samsung Biologics is one of the world's leading CDMO firms, reporting 4.54 trillion won ($3.3 billion) in sales and 1 trillion won in net profit in 2024.

—IANS

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